Back to Resources

Do you have a payroll management contingency plan?

Blogs Payroll

Your payroll management team or individual might be worth their weight in gold, but even golden employees go on holiday, get sick, have personal crises, and are particularly unskilled in the prevention of natural disaster. Here is an important question to consider:

How can you ensure your payroll process will be correctly executed if you experience regretted turnover in Payroll?

It is a bad day for HR when a tried and trusted payroll manager gives notice. Whatever your situation, be sure to have a clear payroll contingency plan. You never know what may be lurking around the corner, and being prepared is worth its weight in gold.

Below outlines key measures every business can (and should) employ to prepare for the unknown.

Ensure you have a trained payroll backup

One of the most critical risk management criteria The Association for Payroll Specialists (TAPS) looks for in a compliance audit is a trained backup for the payroll function. This is the case if you have a sole practitioner or a large payroll team. Don’t make the mistake of presuming there is a reserve resource who goes by the name of “Plan B”.

TAPS runs a Foundations of Payroll course and can assist you in developing your backup persons’ payroll skills in a classroom setting.

Regularly check your current payroll system is up-to-date with legislation

Prevention is always better than cure. Every dentist will tell you the patients with the highest bills are the ones who wait for significant pain before making an appointment. Payroll compliance check-ups (like dental visits) are a worthwhile investment in time and resources.

An internal audit causes a short-term burden on the payroll function, but short-term pain is always better than the longer-term pain (and potential fines) that result from non-compliance.

In a self-audit, Spotless Services Limited discovered $42,544 in underpayments in the first wave of the audit. The audit was co-managed by the Fair Work Ombudsman, and three key compliance issues were identified:

  • Treatment of public holidays where employees worked across midnight.
  • Calculation of the additional annual leave entitlement for shift workers.
  • Payment of leave loading on unused annual leave paid on termination.

Spotless were given public praise for their self-audit efforts. The Fair Work Ombudsman Natalie James said, “We congratulate Spotless for showing corporate responsibility and a commitment to operating fair workplaces to its thousands of young and casual employees.”

Backup your payroll files regularly

What would you do if you lost all your payroll data, and how seriously do you take the backup process? Best practice suggests backups are stored on removable media AND hard disc. This data should be kept in a fire-resistant safe.

Audit the entire payroll process and make sure it is well documented

An audit of process is a critical step to ensuring payroll continuity. A review can be very revealing. Many businesses find frightening amounts of important company information stored in the head of a lone practitioner ¬¬– and nowhere else. Documenting payment policies and procedures give you the opportunity to check for procedural correctness and efficiencies. This data can also be used as the basis to manage your requirements when considering technology upgrades, or when you need a helping hand to step in.

Executing a thorough process audit also gives business leaders comfort that their business risk is substantially lowered.

Know when to ask for outside help

If you need support managing continuity of payroll processing, don’t be afraid to ask for help. Find a trusted outsource payroll service provider to help you deal with an absence or departure of critical resources.

Outsourcing is flexible, convenient and makes good business sense. Whether or not you expect changes in your team, the above steps can help you create smooth payroll processes within your organisation.


The post Do you have a payroll management contingency plan? appeared first on Ascender HCM.